We are looking into partnering with an investor to sell our Jumbo loans to. One of their requirements is second appraisal for loans $750,000-$1,500,000and that cost will be passed to us. Can we pass the cost of the second appraisal to the borrower.

Why not, as long as you disclose that it is a requirement and the investor is OK with it. Under the appraisal guidelines however, unless they end up with the same value, one would be deemed correct and one would be deemed wrong. You cannot shop for value.

The 2nd appraisal is required by the investor. From my understanding, I'll be sitting in on my first conversation tomorrow, the investor will be doing all disclosures and underwriting. The loan will close in our name and we will sell it to them servicing released.

So what are you doing to earn any fees or compensation in this process? Also, since you are the original creditor and will remain on the hook for all civil and regulatory liability, I would be careful about just blindly following their lead. I surely hope your attorney (assuming they are well versed in these issues) is involved in this discussion.

I fully understand we are responsible for the disclosures and other regulatory requirements. We will be taking the application, discussing the different loan options, collecting required verification documents, arranging the closing. We basically will be doing the same things for these loans as we do for loans sold to Freddie.0

Then it is going to be a business decision regarding the justification of charging a borrower for a second appraisal when it is only a secondary market requirement.